Thanks for the ideas everyone!
I'm a little embarrassed to admit that she already has 75% of the things posted here.
I guess I tend to buy her too many toys, but many of them came from children's consignment sales for very cheap.
I think I'm going to be kind of low key this Christmas, and not overdo it on the gifts. She still has stuff from last Christmas that she has barely played with.
I can relate. My DD(6) is an only child, and an only grandchild on one side with an overindulgent grandmother with nothing better to do than spoil her! We had to buy a bigger house to fit the toys!
If you want an Ipad, but don't want to spend the money, you might want to look into a TABEO at Toys R US. It is $150, but it basically is an IPAD(well technically it is a Droid) for kids. I know of several people who are getting it for their 3 year old IPAD addicted kids! DD is getting one for Christmas and we just got it in the mail and took it out of the box this morning to make sure it works. We were pretty impressed with it. It comes pre-loaded with over 50 popular apps loaded onto it (things like Angry Birds and Cut the Rope- there is a full list on the TRU website) and you can get more. There are over 7000 apps available on the Tabeo App store. It also has a camera (photo and video) and wifi access to the internet with parental controls you can set to stop or limit that, or require your approval before any website is accesses. You can also buy car adaptors, so you don't have to worry about running out of power on a long car trip.
DD got the leappad last year for christmas and loves it, but considering the leappad 2 is $100 and then the games are separate at $20 to $25 each, the Tabeo seems to give you a lot more for your money. I will say that the leappad is another good choice though.
I assume your DD already has a play kitchen? If not, DD got that for her 2nd birthday, and that is something at age 6 that she still plays with. The other thing from that age that still gets a lot of use is the kid sized table and chairs- DD has basically outgrown them, but her dolls haven't and they have lots of tea parties and attend lots of restaurants on them. I believe that she got that for Christmas from Santa with a new doll sitting at it and new dishes on it.
DD actually discovered American Girl when she was 2 (thanks to our niece being hooked on it and DD seeing a catalog). She got her first doll from Santa at age 2 years 10 months, with the reason that she had been telling us for 6 months that Santa was bringing her that doll (Felicity) and it was the No. 1 must have, nothing else will do, thing on her Christmas list. It was a huge hit-still is 4 years later. Just be aware that one you start AG, you can never go back!
If all else fails, just walk her through a toy store or toy department. I bet she is old enough to give you a good idea of what she wants!